Originally published July 8 2005
Getting a handle on rising health care costs
by Mike Adams, the Health Ranger, NaturalNews Editor
The Bureau of Labor Statistics reports that health care costs rose 7.5 percent in 2004, well under the 11.4 percent rise in 2002, but from March 2004 to December 2004, it rose only 3 percent.
How many times have you heard that health care costs are rising at record rates?
The Bureau of Labor Statistics reports that health care costs rose 7.5 percent in 2004, well under the 11.4 percent rise in 2002.
Politicians and political commentators always assume that government must do something new and different if health care costs are to be held down to bearable increases.
One thing that is going on is that employers are offering and employees are choosing health savings accounts and high-deductible health insurance in greater numbers.
HSAs were given a big boost in the Medicare prescription drug bill passed in November 2003; indeed, that was the reason that most Republicans voted for a bill that also included the biggest new entitlement program since Medicare was passed in 1965.
The number of people covered by HSAs and high-deductible insurance policies increased from 438,000 in September 2004 to 1,031,000 in March 2005.
High-deductible health insurance operates the same way high-deductible auto insurance does: It does not pay for the equivalent of your oil change but does pay you when your car is totaled.
For many years, the World War II decision to make health insurance coverage tax-deductible for employers and non-taxable to employees has driven health insurance to a different model, one that pays for virtually every procedure but in a surprising number of cases does not cover catastrophic costs.
As Wall Street Journal columnist Holman Jenkins points out, the tax subsidy to employees, while worth a lot to high-income earners, is worth very little to those whose income tax liability is low or, as in the case of Earned Income Tax Credit recipients, nonexistent.
The other interesting development is the emergence of health insurance policies that encourage healthy behavior.
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